Pricing and matching under duopoly with imperfect buyer mobility

Massimo De Francesco ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: Recent contributions have explored how lack of buyer mobility affects pricing. For example, Burdett, Shi, and Wright (2001) envisage a two-stage game where, once prices are set by the firms, the buyers play a static game by choosing independently which firm to visit. We incorporate imperfect mobility in a duopolistic pricing game where the buyers are involved into a multi-stage game. The firms are shown to have an incentive to give service priority to loyal customers. Under this rationing rule, equilibrium prices converge to their value under perfect buyer mobility as the number of stages of the buyer game increases

Keywords: Bertrand competition; matching; imperfect mobility; sequential equilibrium; buyerloyalty (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2004-11
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:439

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